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Filed on February 21, 2007, published the first business day after.
- CUNA e-Guide offers UBIT answers
- Financial education simply a CU function, says CEO
- Bankers misinform again, says CUNA
- CUs post asset growth for 2006
- Inside Washington
- Lafayette chair: Petitioners signed under false pretenses
- Grassley to Iowa CUs: CUs won't be taxed
- Illinois state treasurer pledges $1.7 million to low-income CUs
- PCUA launches newsletter for state legislators
- California/Nevada YIN joins NEFE’s launch team
- FSCC shared-branch dividends exceed $2 million
- WOCCU-Bolivia program progresses in rural areas
- Pueblo Government Agencies FCU makes turnaround
- CU System briefs
- Market News
- News of the Competition
- Consumer brief
- Diebold recognized as a top outsourcer
- Fiserv enhances e-bill payment solutions
CUNA e-Guide offers UBIT answers
WASHINGTON (2/22/07)—The Credit Union National Association (CUNA) has made available a comprehensive Q-and-A compilation of unrelated business income tax (UBIT) issues based on inquiries submitted during a Feb. 7 webinar.
The free webinar was held to share with credit unions the most recent information regarding Internal Revenue Service guidance on what state chartered credit union products and services may be subject to UBIT.
The webinar was sponsored by CUNA, CUNA Mutual Group, the National Association of State Credit Union Supervisors (NASCUS) and the American Association of Credit Union Leagues (AACUL).
CUNA and CUNA Mutual compiled the Q&A, broken down in three areas: Filing issues; products and services; and "other" issues. The following questions are representative of the breadth of the topics addressed:
- Is it gross or net UBIT that triggers the filing of the 990-T form?
- How does filing, or not filing, affect the ability of the IRS to assess back taxes?
- How does the expected public release of technical advice memorada (TAMs) possibly affect a CU's consideration of filing a 990-T this spring?
- How might shared branching income be affected?
- How might debt cancellation income be treated?
- Is a 990-T subject to public disclosure?
The panel of UBIT experts, moderated by Brett Thompson, president of the Wisconsin CU League, will discuss the development of a coordinated credit union strategy to fight adverse IRS rulings that subject certain products and services to UBIT assessments.
Scheduled panelist include: Kevin Fincher, senior tax manager, Clifton Gunderson, LLP; Faye Patzner, chief legal officer, CUNA Mutual; and Sandra Troutman, executive vice president of government relations, NASCUS.
The complete Q&A is available in CUNA's members'-only e-Guide to Federal Laws and Regulations under the UBIT topic, which also contains a summary of the UBIT requirements, links to the IRS forms, instructions, regulations and publications, and numerous other UBIT resources.
Financial education simply a CU function, says CEO
WASHINGTON (2/22/07)--A Maine credit union chapter's Youth Financial Education Fair has piqued the interest of those interested in financial literacy programs--including those in Washington, D.C.
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 Donna R. Steckino, president/CEO of Community CU, Lewiston, Maine, during yesterday's Financial Literacy Summit at the Department of Education in Washington, D.C. CLICK TO ENLARGE (Photo provided by CUNA) |
Donna R. Steckino, president/CEO of Community CU, Lewiston, Maine, participated in a two-day, financial education summit here this week sponsored by the U.S. Treasury and Education Departments. She participated in a panel of volunteers who taught programs in the classroom.
Steckino represented the Credit Union National Association (CUNA), credit unions and Community CU. She outlined her credit union's efforts-—along with the Norm Nolette Chapter and the Maine Credit Union League--to promote youth financial education.
The chapter's Youth Financial Education Fair for high school students was an outgrowth of the chapter's in-classroom instruction using the National Endowment for Financial Education's (NEFE) High School Financial Planning Program. The curriculum is requisite preparation for students' journey through "life" on fair day. A local community college donates space for the event.
"On the day of the fair, students get budget worksheets with salaries based on their career choices and through visits to various booths, such as housing, transportation and credit," said Steckino. "Students are asked to make real life choices and experience the exercise of balancing their budget on income allocated from their career choices."
As the fair progresses, students learn the effects of their choices, such as the sports car, home or vacation they cannot initially afford, she said. Volunteer coaches then guide the students through various options to bring their budgets back in line.
"Aside from the financial benefit, the message usually comes through loud and clear: ‘I need a better education to obtain a better lifestyle,'" said Steckino.
Student participation in the event's third year has doubled to more than 500 from the first event. The Norm Nolette Chapter of Credit Unions has received CUNA's Desjarins Youth Financial Education Award each year.
But Steckino emphasized the real prize for credit union volunteers involved in the effort is actual student feedback. She shared a sampling:
- "It is important to sort out what you need versus what you want."
- "Pay yourself first."
- You need to plan ahead."
- "I now know why my parents sometimes have to say ‘no' to something I ask for--I won't bug them anymore."
- "I am going to think about having kids--they are going to cost a lot!"
- "Don't spend more than you earn."
During the question and answer session that followed, panelists were queried about the motivation and level of commitment from his or her respective organization. Steckino did not hesitate in her answer.
"Helping people help themselves through financial independence is what credit unions are all about; it's why we're in business," she said. "These one day fairs and ongoing financial education programs are an effective and low cost way through experiential learning to help today's youth become more fiscally responsible adults."
"I also believe that this is one way I personally can make a difference--even if just to a few," reflected Stecknio. "A legacy of change comes through the education and change of individuals--one at a time."
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 Ted Beck (left), president/CEO of the National Endowment for Financial Education (NEFE), and Donna R. Steckino, president/CEO of Community CU, Lewiston, Maine, discuss new curriculum updates to NEFE's High School Financial Planning Program. Steckino and 10 other credit unions in the Maine chapter use the NEFE program. CUNA sponsors the printed materials. CLICK TO ENLARGE (Photo provided by CUNA) |
Bankers misinform again, says CUNA
WASHINGTON (2/22/07)--Richard Gose, director of the Credit Union National Association's (CUNA's) political affairs department, said Wednesday that it was "curious timing" for the bankers to place an ad this week urging Congress to oppose credit union legislation.
Gose noted that the bill in question, the Credit Union Regulatory Improvements Act, has not even been introduced for the year and Congress is not in session this week.
"Federal lawmakers don't come back into session until Monday—when 4,000 credit union people descend on Washington for CUNA's annual Governmental Affairs Conference," Gose said.
The American Bankers Association (ABA), listing the names of each state association plus one from Puerto Rico, ran a full-page ad in the Capitol Hill publication, Roll Call, Tuesday urging lawmakers to "oppose the Credit Union Regulatory Improvements Act."
"No regulatory improvements bill has yet been introduced by the 110th Congress, yet bankers feel a need to misguide the discussion before the discussion begins," Gose said.
He added that introduction of such a bill is considered imminent, and remarked that the bankers' campaign to "misinform" lawmakers is likely to miss its mark.
"I think members of Congress and their staffs have gotten savvy to the bankers' tired tries of manipulating legislative discussions involving credit union services to be all about what bankers want," Gose said.
"I think the fact that the bankers use the same anti-competitive arguments against credit unions, as they do against farm credit lenders, as they do against realtors, is starting to make it clear that they have just one message—Bankers do not like competition and the pro-consumer effects competition brings," he added.
Noting what he called a "banker tactic" of trying to divide small credit unions from larger ones, Gose said the bankers have probably done more to help credit unions on the issue of unity of purpose than credit unions could have done for themselves.
"A credit union is a credit union because of its not-for-profit, member-owned structure—not because it is one size or another. A credit union returns its earnings to its members regardless of its size.
"The more bankers bring up the subject of size, the more opportunities we get to inform policymakers about the features that truly define a credit union," the CUNA SVP said.
Reviewing the ABA ad, Gose said he found one thing "particularly peculiar."
"On the one hand the bankers are saying credit unions aren't doing enough to serve their communities. On the other, they are crying to Congress to keep credit unions away from the tools they need to modernize service to members.
"Do they not get tired of hypocrisy?" Gose asked.
CUs post asset growth for 2006
ALEXANDRIA, Va. (2/22/07)--Federally insured credit unions reported 4.6% growth in assets in 2006 according to year-end call report data released by the National Credit Union Administration (NCUA).
NCUA reported Wednesday that assets equaled $709.9 billion, up from $678.7 billion a year earlier.
Investments for the year declined 9.1%, to $134.4 billion from $148 billion, but investment income grew 18.8 %, an increase the agency said tracked strong investment yield growth as Treasury bill rates increased over the year.
Delinquent loans also continued to decline and net charge-offs dropped 11 basis points. "In addition to continued increased lending, credit unions reported an average return on assets of 0.82% and a net worth ratio of 11.54% at year-end 2006," said NCUA Chairman JoAnn Johnson in a release.
"Year after year of strong financial results indicate credit unions are prudently managed and well-run stewards of their members' money, and in doing so fulfill their mission to enable consumers to save and invest in a cooperative environment," she added.
Other highlights noted by the agency include:
- Loans increased 7.9% to $494.3 billion from $458.2 billion;
- Shares increased 4.1% to $601.2 billion from $577.6 billion;
- Net worth increased 7.4% to $82.0 billion from $76.3 billion;
- Membership increased 1.5% to 85.8 million members.
The agency also noted: Examining asset specifics, real estate, the largest category of credit union lending, reported continued strong growth. First mortgage real estate loans grew 10.0% to $169.7 billion, while other types of real estate loans grew 15.0% to $84.4 billion.
Tracking Federal Reserve Board findings that the housing market cooled substantially in 2006, federally insured credit union real estate loan originations declined 5.2% over the year, and delinquent real estate loans increased – total real estate loans over two months delinquent increased 41.3% to $825.6 million and first mortgage real estate loan charge-offs increased 34.0%.
In lending, new auto loans overtook used auto loans in the auto lending category for the first time since 2000. New auto loans grew 5.4% to $88.5 billion, while used auto loans grew 1.1% to $87.6 billion.
Among the various share accounts, share certificates grew 23.8% to $189.0 billion surpassing regular shares for the first time to become the largest share category , as reported by CUNA's Economics and Research department recently.
Money market shares grew 1.4% to $100.4 billion, and IRA/KEOGH accounts grew 7.7% to $52.0 billion. Regular shares declined 6. 8 % to $181.0 billion and share drafts declined 6.8% to $70.4 billion.
The return on average assets declined slightly, from 0.85% to 0.82% as the result of increased cost of fund expenses and net operating expenses.
In miscellaneous data reported, the number of regular and credit cards loans charged-off declined while the amount of recoveries increased respectively. Also, the number of members filing bankruptcy and amount of loans subject to bankruptcy declined significantly during 2006.
The Credit Union National Association (CUNA) will provide a complete analysis of the agency's data, including a credit union forecast for next year. Check Friday's News Now.
Inside Washington
- WASHINGTON (2/22/07)—Key members of the House Financial Services Committee have asked the Federal Reserve Board to change its Regulation B, which enforces the Equal Credit Opportunity Act, to allow creditors to collect data on race and gender on small business loan applications. The committee's chairman, Rep. Barney Frank (D-Mass.) and three subcommittee chairmen, Reps. Maxine Waters (D-Calif.), Melvin Watt (D-N.C.) and Luis Gutierrez (D-Ill.), as well as a former committee member, Rep. Barbara Lee (D-Calif.), suggested that that lending discrimination could be better reduced if the system were made more transparent. The prohibition against lenders gathering gender and race data on applications was adopted in 1973 under the premise that lenders would not be able to discriminate based on race or gender if they were not allowed to ask for those details. (American Banker Feb. 21)...
- WASHINGTON (2/22/07)—The Justice Department may act within the next few months to take action against some bank and nonbank lenders as a result of their 2004 Home Mortgage Disclosure Act (HMDA) data. It would be the first such action by federal enforcement agencies. (American Banker Feb. 21). The article noted that in September 2005, the Federal Reserve Board identified approximately 200 lenders — half of them banks — with pricing disparities in the previous year's HMDA data. The agency sent its list of "outliers," representing about 2% of all reporting lenders, to the appropriate state and federal banking agencies for further review...
- WASHINGTON (2/22/07)—A recent Government Accountability Office (GAO) report suggested that the Federal Deposit Insurance Corp. (FDIC) update its simulation of large-bank failures to better prepare for potential problems. On the plus side, the GAO report on the FDIC's human capital and risk assessment programs noted that the agency has extensive systems in place to monitor external risk and prepare for failures. However, it noted that some systems were not "regularly or comprehensively evaluated." An example was that some simulations of FDIC plans for handling large-bank failures were either out of date or inconsistent with the agency's own guidance. The GAO report was one of many mandated by last year's deposit insurance reform legislation. (American Banker Feb. 21)...
Lafayette chair: Petitioners signed under false pretenses
KENSINGTON, Md. (2/22/07)--The chairman of Lafayette FCU says the claims of petitioners seeking a board recall "are false and demonstrate a reckless disregard for the truth," and "may also be actionable."
Chairman Arnold S. Rosenthal, in an open letter to members posted on the Kensington, Md.-based LFCU's website, says the petition is false and has been "unnecessarily disruptive to the business of the credit union."
The petition is being circulated by opponents of the credit union's proposal to convert to a mutual savings bank. That proposal was withdrawn last month after a membership vote couldn't be certified due to the closeness of the vote and errors in the vote tallying process.
"This petition effort is a maneuver being perpetrated by about one dozen individuals out of our approximately 17,000 members. Nevertheless, we take this matter very seriously," wrote Rosenthal, who added that petitioners' claims that the credit union was unresponsive on technical questions and petitioners' demand to inspect certain records related to the conversion "are absolutely false."
He suggested that petitioners' requests were "ghost-written by non-members, including, we believe by an attorney working for a professional lobbying effort opposed to our credit union. Rather than accepting our repeated invitations to meet and discuss these issues, they responded with a groundless petition."
Rosenthal also suggested that members who signed the petition "did so under false and misleading circumstances" and that some petitioners were "interlopers" and not members of LFCU. He indicated that members were told a number of statements by petition solicitors that are "false and demonstrate a reckless disregard for the truth. They may also be actionable."
He noted the conversion was not about insider greed and that the board unanimously voted to not accept any compensation or stock benefits.
The credit union has already filed one defamation lawsuit against former CEO Bill Brooks Sr. and his son, Bill Brooks Jr. for their criticism of the conversion attempt.
News Now did not receive a response to a request for comment from the petitioners.
Grassley to Iowa CUs: CUs won't be taxed
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| Newly elected Gov. Chet Culver tells credit unions attending the Iowa Credit Union League's Legislative Conference that he was a proud credit union member. (Photos provided by Iowa Credit Union League) |
More than 115 credit union representatives--a record--heard Gov. Culver thank credit unions for their support and Sen. Grassley say credit unions likely wouldn't be taxed.
"Credit unions provide a great service to hundreds of thousands of Iowans," said Culver, a credit union member. He asked for their support in creating one Iowa: "We have a unique opportunity to make our dreams a reality."
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| National Credit Union Chairman JoAnn Johnson congratulates Iowa Congressman Bruce Braley on his recent election during the Iowa Credit Union League's Legislative Conference held Tuesday. |
Rep. Braley (D-First) reminded the group that at last year's conference he said it was time to send an Iowa credit union member to Washington, D.C. He thanked credit unions for their support in reaching that goal and told attendees his election fund--both before and after his election--was deposited in an Iowa credit union.
Johnson noted that with new faces in Congress, credit unions will see a shift in emphasis. "The focus on credit union taxation is not going to be nearly as high as it has been in the past," she said. However, she said more emphasis likely would be placed on consumer protection issues.
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| U.S. Sen. Charles Grassley speaks with Dupaco Community CU CEO Bob Hoefer, left, and Veridian CU Executive Vice President Mike Harvey (center) at the Iowa Credit Union League's legislative reception. |
Credit unions must focus on membership growth and keeping their credit union vibrant by bringing in younger staff and board members and offering new products and services, said Johnson. "Credit union members will go elsewhere if they can't get contemporary services from you. If you aren't offering these services, remember your competitors will."
Other conference speakers included Iowa Senate Majority Leader Michael Gronstal (D-50), Iowa House Minority Leader Christopher Rants (R-54), and motivational speaker and former NBA player Tim McCormick.
An evening reception enabled credit unions to interact with more than 100 Iowa legislators.
Illinois state treasurer pledges $1.7 million to low-income CUs
SPRINGFIELD, Ill. (2/22/07)--The Illinois State Treasurer's Office has pledged $1.7 million to low-income designated credit unions in the state to help residents who don't have access to services from traditional financial institutions.
State Treasurer Alexi Giannoulias made the announcement outside the North Side Community FCU in Chicago (US Fed News Feb. 19).
The office will offer discounted deposits of up to $100,000 to 17 low-income-designated credit unions at a 3.5% interest rate for a 12-month period. The interest rate is 1.5% below the market rate.
The money can help provide resources so the credit unions can help low-income residents who might otherwise turn to payday lenders, Giannoulias said.
The low-interest loans will enable borrowers to pay off debt, afford housing, build credit and receive financial counseling, he said.
In the article, North Side Community CEO Ed Jacob noted that the credit union depends on support from outside sources to offer such programs to community residents.
"The State Treasurer's commitment is important from a financial perspective, but it also shows a commitment to improving people's lives," he said.
PCUA launches newsletter for state legislators
HARRISBURG, Pa. (2/22/07)--The Pennsylvania Credit Union Association (PCUA) Governmental Affairs Department has created a one-page monthly newsletter to educate Pennsylvania's General Assembly about credit unions.
Titled CU in the Community, this publication will share market information--such as how much credit unions save the average household; payday lending alternatives like the Credit Union Better Choice Program; and other information that differentiates credit unions from other financial institutions (Life is a Highway Feb. 21).
Each monthly issue also will highlight a specific credit union to show how it is introducing itself in the community through programs for the underserved, financial literacy and other areas.
"We really want to highlight how credit unions are helping consumers in their communities," says Christina Mihalik, assistant vice president, governmental affairs. "We encourage credit unions to share their information on community programs, payday alternatives, financial literacy, and youth financial education."
The newsletter will be distributed to members of the Pennsylvania State House and Senate, and also will be used during personal office visits with legislators and their staff.
California/Nevada YIN joins NEFE’s launch team
RANCHO CUCOMONGA, Calif. (2/22/07)--The California and Nevada Youth Involvement Network (CNYIN) has recently joined the National Endowment for Financial Education's (NEFE) High School Financial Planning Program (HSFPP) National Network Launch Team.
The CNYIN will partner with the California and Nevada Credit Union Leagues, The University of California Cooperative Extension, the University of Nevada Cooperative Extension, and the California Society of Certified Public Accountants to help distribute NEFE's newly updated HSFPP curriculum throughout California and Nevada. This updated curriculum is linked to education standards in all 50 states, and to several national subject-area standards.
"The CNYIN has a unique opportunity to affect not only the future of credit unions, but also the future economic well-being of the nation, through educational efforts that produce financially literate adults," says Cathy M. Arra, the leagues' liaison to the CNYIN and NEFE launch team contact.
The CNYIN will begin its NEFE Launch efforts by hosting a booth at the leagues' Big Valley Educational Conference, to be held March 25-27 in Monterey, Calif.
A "Train the Trainer" workshop will follow on May 10, from 11 a.m. to 4 p.m. at the leagues' Rancho Cucamonga, Calif., office. The workshop is open to CNYIN members, University of California Cooperative Extension county advisors, and other teachers that use the NEFE financial planning program in their schools.
FSCC shared-branch dividends exceed $2 million
SAN DIMAS, Calif. (2/22/07)--Financial Service Centers Cooperative, Inc. (FSCC) has hit an all-time high with an anticipated patronage dividend over $2 million for transactions performed in 2006, it was announced at the company's Feb. 14 board meeting.
The dividend, which is a nearly 12% increase over 2005, will be distributed to patrons following FSCC's annual audit sometime in April. This dividend is paid out to shareholders for acquired transactions performed in their branches.
In addition, FSCC announced that in December 2006, the network distributed nearly $400,000 to shareholders for acquired transactions--which was the final cash payout of dividends for 2002.
Per year-end figures, FSCC processed more than 45 million transactions with deposits totaling more than $5 billion, withdrawals going over $1 billion, while credit advances reached over $18 billion, and payments increased to $255 million.
"There is no shared branching without credit unions willing to share their branches, so we are deeply grateful to our acquirers for this level of cooperation," says Sarah Canepa Bang, FSCC CEO. "At the same time, we continue to invest resources toward even further expansion of the network, including kiosks, our call center and more. This benefits all issuers and acquirers."
In November 2006, the FSCC Board of Directors approved the 2007 patronage dividend strategy, which will again be based on acquired transactions.
"Continuing our strategy of support for acquirers on the network demonstrates our commitment to cooperation and expansion," says FSCC Chairman Steve Dahlstrom, CEO of Spokane Teachers CU.
FSCC has returned sizeable patronage dividends year after year, with some credit unions receiving annual dividends in the hundreds of thousands of dollars.
Currently, FSCC is working with 7-Eleven to expand shared branching services through select 7-eleven stores, allowing members to access their credit union accounts at more than 2,000 additional locations across the country. Officials predict that the increase in locations will jump from 2,400 to 4,500 after implementation.
WOCCU-Bolivia program progresses in rural areas
MADISON, Wis. (2/22/07)--Eight new rural credit union branches, a shared branch network with 64 points of service, remittance distribution and several new savings and credit products are offered by the Bolivian credit union sector in the World Council of Credit Unions' (WOCCU) Rural Credit Union Growth Program.
The four-year program, which ended in December, was funded by the U.S. Agency for International Development in La Paz and built on the foundation of past WOCCU-USAID projects in Bolivia.
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| Shoeshine boys deposit their earnings into new youth savings accounts at CACTRI, Ltda., in San Borja, Bolivia. (Photo provided by the World Council of Credit Unions Inc.) |
For years, the credit union sector lacked financial discipline to build a sustainable foundation and strategy to reach rural areas. Credit unions were at a low level of lending and had a high percentage of nonproductive assets, weak institutional capital and a low profit index, said WOCCU. Delinquency rates averaged 40% and provisions were insufficient to protect against potential losses.
"We looked at the system and saw that credit union executives and directors were deciding the direction of their credit unions without considering their members' needs," said Julio Fernandez, former WOCCU-Bolivia project director. "While working to solidify the sector's financial viability, we also helped credit unions develop a new way of packaging, promoting and selling financial services."
The program established ServiRed, a shared branching and remittance network so rural members could access International Remittance Network (IRnet) services, savings accounts and loans in their communities. It unites 19 credit unions through 64 service points of throughout the country. Corporate One CU in Ohio lent its information technology expertise to help establish the network, which operates on broadband and dial-up Internet connection.
The program also helped improve financial discipline among credit union management. Participating credit unions reduced delinquency to an average 5% and provided competitive interest rates, which attracted more members. Agriculture credit, payroll credit, microbusiness loans and housing loans now represent about 70% of total assets and annual profits allow for a high solvency level. Total savings has increased nearly five times the amount saved in 2002.
Eight credit unions established and strengthened eight corresponding rural branches in a co-financing plan with WOCCU-Bolivia. The branches serve more than 6,000 members with a savings volume of $3.1 million and a loan volume of more than $4.5 million.
WOCCU's fifth project in Bolivia, also funded by USAID, began in September 2006. It will expand on the growth of the previous program and focus on uniting and strengthening Bolivia's microfinance sector to foster cooperation and growth in underserved areas.
Pueblo Government Agencies FCU makes turnaround
PUEBLO, Colo. (2/22/07)--Pueblo Government Agencies FCU has made strides in recent months to underscore the strength of the $23 million asset credit union and secure a bright future.
At the helm is its new president, David C. Russell Jr., who joined the Pueblo, Colo.-based credit union in October 2005.
"We are proud to report that in 2006, we added $650,000 in new assets and over 300 new members," he said, adding the credit union's "net worth is at 15%, which is phenomenal. We are doing well and are stable and growing."
In its 71st year, the credit union received glowing reviews from the National Credit Union Administration (NCUA) on its 2006 camel rating. An outside certified public accountant noted that both its review and NCUA's are a significant improvement and a huge turnaround for the credit union.
Russell attributes the turnaround to a strong board of directors "both previous and current, who provide strong leadership and local governance to service its members."
In 2006, the credit union converted to a cutting-edge technology platform that enables it to provide new products and services, including online banking. More than 10% of its members use online banking today.
"The pivotal move to modernize the credit union is what members told us they wanted and we are happy to deliver to meet their standards," said Russell. "In fact, the power and the flexibility of the system we invested in allow us to offer our members higher certificate rates and lower loan rates in a more timely fashion. That enables us to redirect income in 2006 to our member-owners that in prior years had been retained as excess revenue."
The credit union also is giving back to the community, echoing the credit union philosophy of "people serving people." It supports the Therapeutic Riding & Education Center (T.R.E.C.) for people with special needs and/or disabilities through equine-facilitated activities. Last year it joined other Pueblo chapter credit unions to raise more than $2,000 for the center. It also raises funds and toys for the Salvation Army during Thanksgiving and Christmas and supported a local, nonprofit correctional outreach organization and other organizations that members support.
The credit union also went the extra mile to make sure the credit union is compliant and staff has up-to-date mandatory training. "We strive to adhere to all the rules and regulations to remain compliant and are putting forth strong efforts to provide new staff with the necessary training. We're not perfect, but we are striving to be the best little credit union in Colorado."
It operates with a lean staff--15 employees at two branches--serving those who serve--government employees and their families. Many of its members are of modest means.
Remaining dedicated to the credit union movement is essential at Pueblo Government Agencies FCU. Its board has a nearly 100% attendance record. "Now as we forge into 2007, we aspire to achieve all the elements of our strategic plan, which first and foremost recognizes that member service to our special members is the difference," Russell said.
CU System briefs
- MORENO VALLEY, Calif. (2/22/07)--Visterra CU has launched a program that provides one-stop service and a cash rebate equal to 25% of a real estate agent's commission to members who buy or sell a home with the Home Fortunes program. The Home Fortunes program combines with Visterra's own real estate financing services. According to Donna Palmer, real estate loan manager at the $440,000 credit union, "We recognize that a real estate transaction can be complicated and our members may not have time to focus on, given their business professional lives." The program is made possible through a special arrangement with HomeSold, a division of Fidelity National Financial. Real estate agents are hand-picked and must meet stringent criteria for quality service, said the credit union (Business Wire Feb. 20) ...
- AUSTIN, Texas (2/22/07)--The Texas House of Representatives honored the 75th anniversary of Firstmark CU with a resolution at a ceremony attended by 11 representatives of the $603 million credit union and Texas Credit Union Commissioner Harold Feeney. Rep. Joe Straus (R-San Antonio) authored HCR 77 honoring the credit union, which was chartered in 1932 as the San Antonio Teachers CU ...
- SYDNEY, Australia (2/22/07)--Australian Central CU Ltd. reported its total revenue for the last six months of 2006 were up 14% to $103.1 million, while its assets rose 16.2% to $2.46 billion. Managing Director Peter Evans attributed the performance to the company's ongoing investment in growth programs. It reported a 27% decrease in net profit--to $5.7 million. During the last half of 2006, the company's loans surpassed $2 billion for the first time--a 17.3% increase to $2.14 billion. Deposits also rose 14.8%--to $1.5 billion (Australian Company News Bites Feb. 19) ...
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WAUWATOSA, Wis. (2/22/07)--Fundraising events during 2006 organized and hosted by Wauwatosa (Wis.) CU raised nearly $11,750 to benefit the Children's Miracle Network (CMN). Events included bake sales, raffles, a Chain of Hearts campaign, and the credit union's first Annual Poker Run, in which more than 400 motorcyclists rode a 100-mile route, stopping at participating Harley-Davidson dealers along the way. Presenting the check to CMN representative Peter Sentz is Assistant Vice President Cara Zellmer (Photo provided by Wauwatosa CU) ...
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WESTBROOK, Maine (2/22/07)--Maine CUs' Campaign for Ending Hunger and Maine Special Olympics were recipients of a check for $8,000 from check provider Clarke American. The amount represents the proceeds of checks ordered through Clarke American's Maine Scenic Check Program. In the photo, Jeff Gray, left, of the Maine Credit Union League receives the check from Dan Fuller, Clarke American account representative for the state. About $7,000 will be earmarked for the end hunger campaign, with the remaining amount going to the special Olympics program. Since its charitable partnership with Maine's credit unions began in 2004, Clarke American has contributed nearly $28,000 to Maine credit unions' charities (Photo provided by the Maine Credit Union League) ...
Market News
MADISON, Wis. (2/22/07)
- Higher health-care, food, and air-travel costs boosted consumer inflation last month (Bloomberg.com Feb. 21). The consumer price index (CPI) rose 0.2% in January following a 0.4% increase in December, according to the Labor Department. The cost of medical care jumped 0.8% last month--the largest gain since August 1991. Food prices rose 0.7%, and airfare prices jumped 2.1%--the largest increase since November 2004. A 1.5% drop in energy prices helped moderate the overall CPI in January. The decline followed a 4.2% jump in December. The CPI was up a moderate 2.1% over the 12 months ending in January. Excluding the volatile food and energy categories, the core CPI rose 0.3% in January--reflecting higher costs for tobacco, rents and clothing. The core CPI was up 2.7% over the 12 months ending in January--the largest increase since October. Inflationary pressures will recede this year as the housing market and manufacturing sector continue to weaken, predicts Moody's Economy.com (Feb. 21). Flat energy prices also will help the inflation picture ...
- Health-care spending will double to $4.1 trillion over the next decade, from $2.1 trillion last year, according to a report by economists at the National Health Statistics Group, a unit of the Centers for Medicare and Medicaid Services. The estimate reflects an expected 6.9% average annual growth in spending. Health care will account for almost 20 cents of each dollar spent in 2016--compared with 16 cents last year. Increased spending for prescription drugs, new therapies and an aging population are behind the trend. The report said rising costs for drugs and services will boost out-of-pocket costs for Americans with private health insurance from $250.6 billion last year to $440.8 billion by 2016. However, that means individuals will pay 25% of health-care costs directly by 2016, down slightly from 26.4% in 2006. People aren't necessarily receiving better care for the extra money they pay, said Stu Guterman, a senior program director at the Commonwealth Fund, a New York-based health-research organization. "These numbers dramatize how important it is to make sure we are getting good health care and the right health care and that this care is available to all the people who need it," said Guterman (Reuters and Bloomberg.com Feb. 21) ...
- Government will pay for a growing share of the nation's spending on health care as the federal government and states expand programs and employers cut back health coverage, according to a report by economists at the National Health Statistics Group, a unit of the Centers for Medicare and Medicaid Services. The report predicts that government will account for 48.7% of health-care spending by 2016--up from 45% last year, 40% in 1990, and 38% in 1970. In response, insurers already are shifting their profit strategies towards the government. Humana Inc. intensely marketed the new Medicare drug-benefit plan last year--a strategy that the firm said helped its net income more than double to $155 million in the fourth quarter. Pharmaceutical companies also are enjoying big profits. Almost 14% of retail prescriptions for Bristol-Myers Squibb Co. were financed by the Medicare drug benefit during the first seven months of last year, according to Verispan LLC, a company that compiles prescription statistics. At both AstraZeneca and Merck & Co., Medicare-funded prescriptions accounted for more than 10% of prescriptions during the period (The Wall Street Journal Online Feb. 21) ...
- Mortgage activity retreated last week, according to a report by the Mortgage Bankers Association (mbaa.org Feb. 16). The group's mortgage applications index fell by 5.2% during the week ending Feb. 16 to 606.6, as both purchase and refinancing applications declined. Mortgage rates were mixed last week. The average 30-year, fixed-rate mortgage (FRM) dropped five basis points to 6.19%, while the one-year, adjustable-rate mortgage (ARM) rose seven basis points to 5.81%. The 30-year FRM is now one basis point lower than a year ago, while the one-year ARM is 21 basis points higher, noted Moody's Economy.com (Feb. 21). The research firm predicts that the number of mortgage originations in this spring's housing market will be much lower than last year as prospective buyers hold out for lower prices. That means the housing market will remain a negative for economic growth going forward ...
- The economy remains on a modest growth path, according to a Conference Board report. The board's index of leading economic indicators, which is designed to predict economic growth over the next three to six months, rose by 0.1% in January after a 0.6% increase in December--the first back-to-back gain in a year. "Despite the hike in energy prices and the slump in housing, the economy remains resilient--especially consumer demand," said Conference Board economist Ken Goldstein. Four of the 10 indicators in the index were positives in January--higher consumer expectations, falling unemployment claims, rising stock prices, and an increase in the real money supply. Six of the indicators were negative for economic growth: the factory workweek, building permits, capital-goods orders, the interest-rate spread, vendor performance, and consumer-goods orders (Bloomberg.com and MarketWatch Feb. 21) ...
News of the Competition
MADISON, Wis. (2/22/07)
- The $40 billion payday-lending industry is taking measures to avert more regulation from the federal and state governments. The Community Financial Services Association of America (CFSA), a trade group representing about 60% of payday lenders in the nation, plans to announce new measures--including a prohibition on the advertising of loans for gambling and entertainment, the addition of more "warning" language to marketing materials, and the option of an extended payment plan, which customers could use once a year to repay a loan without having to pay more interest or fees. About 13 states prohibit payday lending, and 37 regulate it. At least 52 bills on payday loans have been introduced by states this year, according to the National Conference of State Legislatures. The federal government entered the fray last year, enacting legislation that caps the annual interest rate charged to members of the military at 36%. Consumer advocates are doubtful about the CFSA's plan. "They just want to offer you a once-a-year, get-out-of-jail card in the hope that legislatures think that looks like reform," said Jean Ann Fox, the Consumer Federation of America's consumer-protection director. According to industry data, the average payday borrower takes out seven loans a year. The average customer earns between $25,000 and $50,000 a year, according to the CFSA (The Wall Street Journal Online Feb. 21) ...
- Continuing the shakeout in the subprime-mortgage sector, NovaStar Financial reported a net loss of $14.4 million for the fourth quarter, compared with $28.1 million in net income a year earlier (The Wall Street Journal Online Feb. 21). "The credit performance of our portfolio and specifically our 2006 originations deteriorated during the fourth quarter," said NovaStar chief executive Scott Hartman. NovaStar took a $17.4 million charge during the fourth quarter for a decline in the value of loans it made last year. It also set aside $13.4 million to repurchase bad loans sold to investment banks. The firm said its bad earnings outlook may prompt it to drop its real-estate investment trust status. Several other subprime lenders--including Ownit Mortgage Solutions, Mortgage Lenders Network USA, and ResMAE Mortgage Corp.--have filed for bankruptcy protection after investment banks cut their financial pipelines (MarketWatch Feb. 16). In congressional testimony last week, Federal Reserve Chairman Ben Bernanke said he is concerned about the subprime sector. "There are some loans that have been made that are not turning out well, and to the detriment of both the lenders and the borrowers," said Bernanke. "We will certainly be watching that carefully and trying to provide guidance and oversight to minimize that risk going forward." ...
- Struggling to revamp after a $6.3 billion accounting scandal, Fannie Mae announced Tuesday that it will withhold about $44 million in long-term inventive bonuses previously promised to 46 current and former executives--including former CEO Franklin Raines, former chief financial officer Timothy Howard, and current CEO Dan Mudd. Corrections to dozens of accounting violations prompted Fannie to lower its earnings by $6.3 billion for 2002 through mid-2004. Regulators said the violations helped boost executive bonuses. Fannie also said yesterday that it will eliminate free financial counseling, travel and country-club memberships, and other perks for executives (The Wall Street Journal Online and American Banker Feb. 21) ...
Consumer brief
- BOULDER, Colo. (2/22/07)--A person with a bachelor's degree can expect to earn about $23,000 a year more than someone with only a high school diploma, according to a recent report from the U.S. Census Bureau. College graduates earned an average $51,554 a year in 2004 (the most recent figures available), while adults with high school diplomas averaged $28,645. High school dropouts earned an average of $19,169, while those with advanced college degrees earned an average of $78,093 (Bottom Line Personal March 1).
Diebold recognized as a top outsourcer
NORTH CANTON, Ohio (2/22/07)--The International Association of Outsourcing Professionals (IAOP) has honored ATM manufacturer Diebold Inc. as one of this year's Global Outsourcing 100.
The list of "the elite of our field" outsourcing service providers defines the standard for excellence in outsourcing service delivery, said IAOP Chairman Michael F. Corbett.
The list goes through a three-part application process. The first part identifies basic company contact information. The second outlines its profile, including outsourcing service areas, industries and the top regions where outsourcing services are marketed. The third consists of 15 questions addressing four fundamental categories including size and growth, customer satisfaction, depth of competence and management capabilities.
Judges also consider revenue, customer outcomes, relationship management approaches and management talent and experience.
The recognition offers an opportunity to highlight the company's integrated solution offering, said Chuck Ducey, Diebold senior vice president of global development and services.
Diebold's integrated services solution integrates cross-disciplinary functions into comprehensive customer solutions that includes hardware and software capabilities, and provides professional and managed services, transaction processing, security and more.
Fiserv enhances e-bill payment solutions
BROOKFIELD, Wis. (2/22/07)--Fiserv Inc. has signed 92 new financial institutions for its Paytraxx solution since launching the electronic bill payment product last spring.
Fiserv attributes the growth to Paytraxx's robust functionality, aggressive development plans and superior integration with other Fiserv solutions.
"In addition to demonstrating our ability to proactively address the changing market demands of the institutions we serve, Paytraxx is an excellent illustration of the power of Fiserv 2.0, a companywide initiative that calls for strategic collaboration across our business units," said Tom Neill, group president depository institution processing at Fiserv.
Paytraxx streamlines operations for everything from payment funding to account enrollment through seamless end-to-end connections to other Fiserv solutions that are critical to the bill payment process.
Paytraxx clients experience greater transaction processing efficiencies through integration with Fiserv EFT and direct core processing system connectivity, both of which reduce nonsufficient fund risk by automatically confirming funds availability before payments are distributed.
Integration with Fiserv core systems also streamlines the enrollment and validation of new users and facilitates unique functionality, such as data mining support. Information housed within the Paytraxx system is available to Paytraxx clients and can be integrated with CRM or other management information systems to facilitate cross-marketing campaigns, profitability analysis and other client initiatives.
The Paytraxx solution features enable financial institutions to control user access, manage payment limits, generate reports, review enrollment history, review payments and alert history, and communicate securely with customers via a web-based interface. The institution can choose from processing options and offer flexibility over user enrollment, authentication, payment posting and customer support.
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